The annual risk-free rate

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Reference no: EM13803967

a. Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.71 and Kr 5.86, respectively. The annual risk-free rate in the United States is 3.51 percent, and the annual risk-free rate in Norway is 5.21 percent.

b. The six-month forward rate on the Norwegian krone would have to be Kr/$ to prevent arbitrage. (Round your answer to 4 decimal places. (e.g., 32.1616))

Reference no: EM13803967

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The annual risk-free rate : Suppose the spot and six-month forward rates on the Norwegian krone are Kr 5.71 and Kr 5.86, respectively. The annual risk-free rate in the United States is 3.51 percent, and the annual risk-free rate in Norway is 5.21 percent.

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